Sunday, December 6, 2009

What Do You Think About The Stock Market Today

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I was talking to a friend the other day and he asked me what do you think about the stock market today. I told him a lot of what I have said on this site and that is that stock market investing is one of the best ways to make money today. It's also easy to lose money as well. The stock market is controlled by a handful of institutions and we really have no impact on it as a small investor. Because of that, you have to realize that when there is money to be made, there are people plotting and scheming to make money off of others.

That's why I think you have to think a little differently about how to invest in the stock market today because otherwise, you'll see your gains diappear. Picture the money in the market like a big wave. It blows through a stock pumping it up like a tsunami and when it leaves your stock it leaves devastation in it's wake.

That's what happens when you don't lock in your gains and you buy and hold like the teach you. Remember that you have to do what they do and not what they say. Spend your time finding stocks that the big money is flowing into with strong earnings and sales. When they start getting out, you should exit too.

How can you tell when to get out? There are two ways. The first is the price and volume action of the stock. When the stock closes lower on higher volume that's a red flag. When the media starts talking about your stock like it's the greatest thing ever, that's probably a cue too because that means the promotion has started and they are now leaving.

Pay attention and you'll start to see this same pattern that I do.

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